Raising a family can be an incredibly rewarding time of your life, but with it comes a lot of responsibility. It is no longer just you and your spouse to worry about; you are responsible for other people and their futures, including if something were to unexpectedly happen to you and the other parent.
While no one wants to worry about the worst scenarios, it is far better to prepare for the worst and give yourself peace of mind that your children and their futures are secure no matter what happens.
Last will and testament
Establishing an estate plan that works for your family is key in ensuring they and the court follow your wishes and distribute or manage your assets the way you intended. Many individuals opt to draft a simple will, which provides basic instructions about your belongings.
Keep in mind that these documents are often not as detailed as they need to be when family members are trying to decipher your requests. Wills are also subject to probate, which can be very time consuming and costly, not to mention all details and transactions are open to public record.
If you have more complex assets, developing a trust can provide privacy, as anything placed inside of them is not subject to probate. You also give the ability for your named beneficiaries to collect your assets immediately, or the trustee may begin managing assets for your children. A trust may also provide instructions on what to do if you become incapacitated and are no longer able to make sound decisions.
Best of both worlds
You may create both documents within your overall estate plan to provide further clarity about your wishes and name a guardian for your children. Putting all large assets and finances into the name of the trust allows them to avoid probate, and you may include additional details about other items in the will.
Be sure to choose a trustee who can act in the best interests of your beneficiaries. This person can be a family member, friend, corporation or lawyer who is a fiduciary and legally required to uphold the highest integrity and standard of practice.